LG Display has raised funds in China to establish LG Display High-Tech, an OLED production joint venture, in Guangzhou, China.
The company has signed a syndicated loan agreement worth 20 billion yuan (3.2 trillion won) with China Construction Bank, the Bank of Communication, the Agricultural Bank of China and the Bank of China. A syndicated loan refers to a certain amount of loan offered by a group of financial institutions to a single borrower on a common basis.
The loan agreement was signed on Dec. 5 between LG Display’s CFO and vice president Kim Sang-don and representatives from the Chinese banks.
The agreement allows LG Display High-Tech in Guangzhou to secure the funds needed to build the plant at a competitive rate for eight years from the Chinese banks.
"The agreement shows that the future of the OLED industry in China, the world’s largest market, is bright. We will exert all our efforts to launch LG Display High-Tech and secure competitiveness in large-scale OLEDs," Kim said.
According to market researcher IHS, demand for OLED TV panels is expected to grow to 7 million units in 2020 and to over 10 million units in the further future.
In response to the surge in demand for global OLED TVs, LG Display has established a joint venture for the production of 8.5-generation OLEDs in Guangzhou, China in July of this year. LG Display and Guangzhou Development Zone invested in the joint venture 70:30. The total investment is about 5 trillion won (US$4.5 billion), including 2.6 trillion won (US$2.3 billion) in capital. The company is currently constructing a 8.5-generation (2,200 x 2,500) OLED production plant and is expected to start mass producing in the second half of 2019.